ITO, Faridabad V. Smt. Ramesh Khaneja, Faridabad

ITA 1765/DEL/2010

• Counselvise Citation: 176520114 RSA 2010
• Duration Of Justice: 3 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 12-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.1765/DEL/2010 ASSESSMENT YEAR : 2007-08 ITO, SMT. RAMESH KHANEJA, WARD-11 (4), 14D/5, FRUIT GARDEN AREA, FARIDABAD. V. FARIDABAD. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AEVPK AEVPK AEVPK AEVPK- -- -9919 9919 9919 9919- -- -H HH H APPELLANT BY : MS. MEENAKSHI VOHRA , SR. DR RESPONDENT BY : SHRI GURJEET SINGH, C.A. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORD ER OF LD CIT(A) DATED 12.3.2010. THE REVENUE HAS TAKEN FOLLOW ING GROUNDS OF APPEALS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITIO N OF ` .1,90,442/- MADE BY ASSESSING OFFICER ON ACCOUNT OF SHAR ES NOT INCLUDED IN CLOSING STOCK THUS SHOWING THE LESS VALUE OF CLOSING STOCK AND NOW AFTER DETECTING THE SAME BY THE REVENUE , ASSESSEE HAS TRIED TO MISLEAD THE FACT BY SUPPLYING A REVI SED CLOSING STOCK LIST. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITIO N OF ITA NO1765/DEL/2010 2 ` .8,11,717/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF VALUE OF SIXTEEN SHARES NOT INCLUDED IN THE REVISED CLOSING STO CK LIST ESPECIALLY WHEN THE ASSESSEE HAD FAILED TO EXPLAIN THE R EASON FOR NOT INCLUDING THE SAME IN THE REVISED LIST OF CLOSING STOCK. 3. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, D ELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE DECLAR ED ITS INCOME FROM PENSION AND ALSO FROM TRADING IN SHARES. DURING ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE WA S DEALING IN SHARES THROUGH TWO BROKERS NAMELY M/S DIVA PORTFOLIO PVT. LTD. AND M/S VOGUE COMMERCIAL CO. LTD. AND THEREFORE THE ASSESSEE WAS REQUIRED TO FILE HER COPY OF DEMAT ACCOUNT MAINTAIN ED WITH THESE TWO BROKERS. FROM THE COPY OF DEMAT ACCOUNT MAINTAINED B Y THE ASSESSEE WITH THESE TWO SHARE BROKERS, THE ASSESSING OFFICER CAME T O THE CONCLUSION THAT THERE WERE CERTAIN SCRIPTS IN THE DEMA T ACCOUNT WHICH WERE NOT DECLARED BY THE ASSESSEE AS PART OF HER CLOSING STOCK. THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE SUBMITTED HER EXPLANATION AS REPRODUCED BELOW:- IN RESPONSE TO THIS QUERY RAISED, THE ASSESSEE FILED WRITT EN REPLY DATED 29.12.2009 WHICH IS SUBMITTED AS UNDER:- AS POINTED OUT IN THE PREVIOUS HEARING OF THE ABOVE SAID ON DATED 24.12.2009, YOUR GOODSELF SAID THAT THERE IS DIF FERENCE IN THE SHARES NOT SHOWN IN THE CLOSING STOCK. IN FACT THE HOLDING DETAIL OF DEPOSITORY ACCOUNT WAS NOT AVAILABLE WITH U S AT THAT TIME. NOW TODAY WE GOT THE HOLDING LIST OF SHARES AS ON 3.2.2007. WE ARE ENCLOSING HEREWITH THE COPY OF HOLDING ACCOUN TOF ITA NO1765/DEL/2010 3 NATIONAL SECURITIES DEPOSITORY LTD. DP WITH VOGUE COM MERCIAL CO. LTD. AND DETAILS OF CLOSING STOCK WITH SHARES AS ON 31.3.2007 IS ENCLOSED. THE SHARE POINTED OUT BY YOUR GOODSELF IS A LREADY SHOWN IN THE PREVIOUS DETAILS ALSO. THE CLOSING STOCK SHOWN BY US ON THE BASIS OF COST OF PUR CHASE OF SHARES OR MARKET PRICE, WHICHEVER IS LOW. THE VALUATI ON SHOWN BY US IS CORRECT AND ACCORDING TO HOLDING ACCOUNT SUBMIT TED HEREWITH. 3. THE ASSESSING OFFICER THEN OBSERVED THAT CERTAIN NEW SCRIPTS WERE INCLUDED IN THE REVISED LIST AND THE VALUATION O F WHICH WAS ` .1,90,442/-. THEREFORE, HE MADE THE ADDITION OF THE SAME. 4. THE ASSESSING OFFICER FURTHER OBSERVED THAT SHARES WORT H ` .8,11,717/- AS DETAILED IN HIS ORDER AT PAGE 5 & 6 WE RE NOT INCLUDED EVEN IN THE REVISED LIST. THEREFORE, HE HELD THAT ASSESS EE HAD NOT DISCLOSED THE VALUE OF SUCH SHARES IN CLOSING STOCK AND MA DE ADDITION OF ` .8,11,717/-. 5. AGGRIEVED WITH THE ADDITION, THE ASSESSEE FILED APPE AL BEFORE LD CIT(A). THE LD CIT(A) AFTER GOING THROUGH THE SUBMISSI ONS OF ASSESSEE DELETED THE ADDITION MADE BY ASSESSING OFFICER BY HOLDI NG AS UNDER:- I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE L D AR AND PERUSED THE ORDER OF ASSESSMENT. I HAVE ALSO GONE THROUGH THE STOCK WITH THE APPELLANT AS PER THE TRANSACTION STATE MENT ISSUED BY THE NATIONAL SECURITY DEPOSITORY LTD. (NSDL) ON 1 8.12.2009 IN RESPECT OF THE SHARE BROKER, M/S DP VOGUE COMMERCIAL C O. LTD. NEW DELHI. AFTER THE VERIFICATION OF THE DETAILED T RANSACTIONS OF ITA NO1765/DEL/2010 4 SHARE DEALING WITH THE APPELLANT IN QUESTION, I FIND THAT THERE IS NO DISCREPANCY OR DIFFERENCE AS PER THE STOCK SHOWN BY THE DEPOSITORY AND THE STOCK BY THE APPELLANT. THE TRANSAC TION STATEMENT OF THE DEPOSITORY ACCOUNT IS AN AUTHENTIC AN D CERTAINLY RELIABLE SOURCE OF INFORMATION WHICH WAS PRODUCED BEF ORE THE ASSESSING OFFICER BUT HE IGNORED SUCH VALID EVIDENCE IN SUPPORT OF THE SHARE HOLDING AS ON 31.3.2007 WHICH IS NOT PRO PER OR TENABLE IN LAW. THE ASSESSEE LIKE THE ASSESSING OFFICER IS VERY MUCH WITHIN THE LEGAL PARAMETERS TO REVISE ITS AFFAIRS ALREADY DECLARED TO THE DEPARTMENT AND UNLESS THERE IS ANY ME ANINGFUL VARIATION IN THE REVISED INFORMATION WHICH IS INAPPLI CABLE, OR IRRECONCILABLE, NO ADVERSE INFERENCE AS SUCH IS CALLED FOR. AS TO THE APPELLANTS CASE HE IS PROPERLY MAINTAINING THE B OOKS OF ACCOUNT AND HAS ACCORDINGLY CALCULATED THE PROFITS FR OM THE SHARE DEALING INDULGED BY HIM DURING THE YEAR UNDER CONSIDERATION. THERE IS NO NEED OF ANY FURTHER EXPLAN ATION IN VIEW OF THE AUTHENTIC STATEMENT OF THE NATIONAL SECU RITY DEPOSITORY LTD. WHICH IS A STATUTORY BODY UNDER THE LA W. THEREFORE, BOTH THE ADDITIONS WORKED OUT BY THE ASSESSI NG OFFICER AT ` .1,90,442/- AND ` .8,11,717/- BEING INCORRECT AND UNWARRANTED AS PER THE MATERIAL ON RECORD STAND DELET ED. IN THE RESULT, THE APPEAL IS ALLOWED, GIVING A RELIEF OF ` .10,02,159/- ( ` .1,90,442/- + ` .8,11,717/-). 6. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 7. AT THE OUTSET, THE LD DR SUBMITTED THAT ASSESSEE HAD SU BMITTED WRONG VALUATION OF CLOSING STOCK AND WHEN SHE WAS CORNE RED SHE MANIPULATED AND INCLUDED SCRIPTS DISCOVERED BY THE ASSESSI NG OFFICER ITA NO1765/DEL/2010 5 AND REDUCED THE VALUE OF CERTAIN SCRIPTS TO ACCOMMODA TE THE VALUE OF SCRIPTS FOUND BY ASSESSING OFFICER. HE FURTHER SUBMITTED T HAT THERE WERE CERTAIN SCRIPTS AS NOTED IN THE ASSESSMENT ORDER TO W HICH LD CIT(A) HAS NOT GIVEN PROPER FINDING AND RELYING UPON THE SUBMISSIONS OF ASSESSEE HAS ALLOWED THE CLAIM. IN VIEW OF THE ABOVE, IT WAS ARGUED THAT ORDER OF LD CIT(A) BE SET ASIDE AND THAT OF ASSESSI NG OFFICER BE RESTORED. 8. THE LD AR, ON THE OTHER HAND SUBMITTED THAT ASSESSEE HAD LOST THE FILE CONTAINING DETAILS OF CLOSING STOCK AND THERE FORE SHE HAD SUBMITTED THE LIST OF CLOSING STOCK ON ESTIMATED BASIS. OU R ATTENTION WAS INVITED TO PAPER BOOK PAGE 12 TO 23 CONTAINING T RANSACTIONS STATEMENT ISSUED BY NATIONAL SECURITY DEPOSITORY LTD ( NSDL) WHEREIN THE SCRIPTS-WISE POSITION OF SHARES AS ON 31.3.2007 WAS PLACED. OUR ATTENTION WAS ALSO INVITED TO PAPER BOOK PAGE 24 WHER EIN THE VALUATION OF SHARES AS PER QUANTITY REFLECTED IN STATEMENT OF NSD L WAS PLACED. IN VIEW OF THE ABOVE IT WAS EXPLAINED THAT THE TOTAL VA LUATION OF CLOSING STOCK REMAINED SAME AT ` .17,53,191.31 WHEREAS THERE WAS DIFFERENCE IN QUANTITY OF CERTAIN SCRIPTS IN THE ORIGINAL LIST OF CLOSING STOCK AND IN THE REVISED LIST OF CLOSING STOCK AS PER NSDL STATEMENT B UT SINCE THE VALUATION OF CLOSING STOCK REMAINED SAME, THERE WAS NO LOSS TO REVENUE AND ASSESSEE HAD DECLARED CORRECT AMOUNT OF CLOSING STOCK . REGARDING SECOND ADDITION OF ` .8,11,717/- THE LD AR SUBMITTED THAT OUT OF SHARES OF 16 COMPANIES, SHARES OF 8 COMPANIES WERE ALREADY INC LUDED IN BOTH ESTIMATED AND REVISED CLOSING STOCK LIST AND BALANCE SHAR ES OF 8 COMPANIES WERE NOT PURCHASED/TRADED DURING THE YEAR A ND THE SAID FACT WAS VERIFIABLE FROM THE STATEMENT ISSUED BY NSDL P LACED AT PAPER BOOK PAGE 9 TO 23. IN VIEW OF THE ABOVE, IT WAS SUB MITTED THAT THERE WAS NO DIFFERENCE AND LD CIT(A) HAS RIGHTLY DELETED T HE ADDITION. ITA NO1765/DEL/2010 6 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT ASSESSEE HAS BEEN DEALING INTO THE BUSINESS OF SHARES THROUGH TWO SHARE BROKERS NAMELY M/S VOGUE COMMERCIAL CO. LTD. AND M/S DIVYA PORTFOLIO PVT. LTD. AS IS APPARENT FROM ASSESSMENT ORDE R AS WELL AS FROM LETTER DATED 26.11.2009 ADDRESSED TO ASSESSING OFFICER BY THE COUNSEL OF ASSESSEE PLACED AT PAPER BOOK PAGE 1. THE LD CIT(A) WHILE GIVING RELIEF TO THE ASSESSEE HAS RELIED UPON ONLY COPY OF DEMA T A/C WITH M/.S VOGUE COMMERCIAL CO. LTD. AND DEMAT ACCOUNT WITH OT HER BROKER I.E. M/S DIVYA PORTFOLIO PVT. LTD. DOES NOT FIND ITS MENTIO N IN THE ORDER OF LD CIT(A). THE ASSESSING OFFICER HAS CLEARLY MENTIONED NUM BER AND NAMES OF SCRIPTS WHICH WERE IN THE DEMAT ACCOUNT OF TH E ASSESSEE AND WERE NOT PART OF LIST OF CLOSING STOCK SUBMITTED BY T HE ASSESSEE. IT IS POSSIBLE THAT ASSESSEE DID NOT BRING TO THE NOTICE OF LD CIT(A) THE DEMAT ACCOUNT WITH M/S DIVYA PORTFOLIO PVT. LTD. AND THEREFORE THE LD CIT(A) ON THE BASIS OF ENTRIES IN THE DEMAT ACCOUNT W ITH VOGUE COMMERCIAL CO. LTD. ALLOWED THE RELIEF. THE NSDL ST ATEMENT AS RELIED UPON BY LD AR IS ALSO IN RESPECT OF BROKER M/S VOGUE CO MMERCIAL CO. LTD. AND NSDL STATEMENT OF ASSESSEE THROUGH BROKER M/S DI VYA PORTFOLIO (P) LTD. IS NOT ON RECORD AND WAS NOT BROUG HT TO THE NOTICE OF LD CIT(A). MOREOVER, WE OBSERVE THAT IN THE LIST OF S HARES OF CLOSING STOCK PREPARED ON ESTIMATED BASIS AND ON ACTUAL BASIS THE RE IS SIGNIFICANT DIFFERENCE BETWEEN THE VALUATION OF CERT AIN SCRIPTS THOUGH THE QUANTITIES IN BOTH LISTS REMAINED SAME. A FEW EXAMP LES ARE AS UNDER:- --------------------------------------------------- ------------------------------------------------ NAME OF NO. OF SHARES ON VALUATION AS PER SCRIPTS. ESTIMATE BASIS ACTUAL BASIS ESTIMATED STOCK REVISED LIST. --------------------------------------------------- ------------------------------------------------ BELL CERAMICS 500 500 18279 13680 ESSR STEEL 3000 3000 186745.37 142 380 ITA NO1765/DEL/2010 7 NEW CAM 550 550 33852 3311 TATA TELE 4100 4100 131080 111397 IT SEEMS THAT VALUATION OF CERTAIN SCRIPTS WERE REDUCED TO ACCOMMODATE THE VALUATION OF ADDITIONAL SCRIPTS FOUND IN THE DEMAT ACCOUNT OF ASSESSEE. THIS ASPECT OF LOWER VALUATION HAS N OT BEEN EXAMINED BY LD CIT(A). THE ASSESSEE CLAIMED THAT VALUAT ION OF CLOSING STOCK WAS DONE ON COST PRICE OR MARKET PRICE WHICHEVER IS LOWER, THEN HOW SUDDENLY THE VALUATION IN THESE SCRIPTS WAS BROUGHT DOWN IN THE REVISED LIST. THIS MATTER NEEDS FURTHER EXAMINATION. 10. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE D EEM IT APPROPRIATE TO REMIT BACK THE FILE TO THE OFFICE OF LD CIT(A) WHO WOULD REQUIRE THE ASSESSEE TO FILE COPY OF DEMAT ACCOUNT OF A SSESSEE WITH M/S DIVYA PORTFOLIO PVT. LTD. AND WE WILL TAKE INTO ACCOUNT THE VALUATION OF SHARES IF ANY FOUND LAYING IN THE NAME OF ASSESSEE WIT H THAT BROKER. 11. THE LD CIT(A) WILL ALSO LOOK INTO THE ASPECT OF R EDUCTION OF VALUATION OF CERTAIN SCRIPTS AND WILL EXAMINE THE MAR KET PRICE OR COST PRICE AS ON 31.3.2007 TO ARRIVE AT HIS FINDINGS. 12. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE R EVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 13. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH DAY O F FEBRUARY, 2014. SD/- SD/- (I.C. SUDHIR) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER ITA NO1765/DEL/2010 8 DT. 07.02.2014. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 12.12.2013 DATE OF DICTATION 5.1.2014 DATE OF TYPING 5.1.2014 DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.